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STATE OF THE CE INDUSTRY Steve Koenig Director, Industry Analysis Consumer Electronics …and the potential impact.

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Presentation on theme: "STATE OF THE CE INDUSTRY Steve Koenig Director, Industry Analysis Consumer Electronics …and the potential impact."— Presentation transcript:

1 STATE OF THE CE INDUSTRY Steve Koenig Director, Industry Analysis Consumer Electronics …and the potential impact on product returns. With Special Focus On:

2 Today’s Trends … Macro overview Channel trends Shopping Behavior Purchase Drivers Tomorrow’s Opportunities What does all this mean for product returns?

3 MACRO OVERVIEW

4 Industry Megatrends Mobility and connectivity Consumer Empowerment Engagement DEVICES CONSUMERS RETAILING Mobile Connected Devices M-commerce Showrooming Social More $ from fewer customers Relationships, community Partnerships

5 Source: CEA, U.S. CE Sales and Forecasts, July %7.7%3.7%0.2% 4.5% % Growth:

6 CE Big Five Source: CEA 58%41%65%62%73% % HH Owning 2013 Shipment Dollars (Billions)

7 CE Lifecycles 9 Years 4 Years 3 Years 2 Years

8 Cell phone that is not a smartphone Dedicated e-reader Portable game device Camcorder Portable digital audio/MP3 player GPS or navigation device Video game console Desktop computer Digital camera Tablet computer DVD or Blu-ray Disc player Laptop/netbook computer Smartphone HDTV At immediate risk of becoming obsolete Most at risk in the near future Source: CEA, 15 th Annual CE Ownership Study, April 2013

9 Trending in Technology Ultra HDTV Wireless Speakers Soundbars Headphones Xbox ONE, PS4 Wearable Tech VIDEO AUDIO GAMING MOBILE CE returns watchlist? CES Tech Zone

10 CHANNEL TRENDS

11 % of CE Dollar Sales by Macro Channel 4Q End Sept 2013 Source: TraQline US Consumer Survey – Total CE

12 Internet Retailers Continue to Gain $ Share Change % Change % % 4Q End Sept 2013 Discount Store Elec/majap Store Direct / Internet Office Supply Computer Spec Other $ Market Share Source: TraQline US Consumer Survey – Total CE

13 CE Dollar Market Share: 4Q End Sept 2013 Source: TraQline Dollars R4Q Q2’13

14 Retailing Trends Big Box Retail Competing on Price Customer=Commodity Store within a Store Brand Stores Specialty Stores Pop-Up Stores SUNRISE SUNSET

15 CE Superstores Redefined Smaller Footprints Store within a Store Solution Selling Relationships Destination, Demos Service

16 Impact to Returns Brand and specialty stores potentially better at solution selling. Retailers emphasize service; offer set-up Online: more purchases ‘in absentia’? Value mix moving up (higher expectations?) GOOD BAD

17 (MORE MOBILE) SHOPPING BEHAVIOR

18 Spending on Consumer Electronics Annual Household Spend Source: CEA CE Ownership and Market Potential Study (2013) Base: U.S. adults (n=2,000) Average Annual Consumer Spend

19 Where Consumers Browse and Research CE Source: CEA Multi-Channel Alignment in CE Retail (2013) Base: Online U.S. Adults (n=1,027) Question 4: “How often do you use each of the following retail channels when browsing for and researching electronics products?”

20 Omnichannel Marketing 50% of consumers will use a mobile device to help them shop for CE. 15% 2013 Holiday Mobile Channel Sales Of Online Holiday Sales 8.4 Billion Dollars CEA Holiday Research:

21 Pre-Purchase Research Activities Source: CEA, Millennials: The New Face of Retail (2013) Base: Online U.S. U.S. Consumers ages 13+ Q: Which of the following activities, if any, did you do before purchasing the electronics product you purchased most recently?

22 General In-Store Pre-Purchase Activities Source: CEA, Millennials: The New Face of Retail (2013) Base: Online U.S. U.S. Consumers ages 13+ Q: Which of the following activities do you usually do at a BRICK AND MORTAR STORE before purchasing an electronics product?

23 Mobile Device Used for Shopping at Physical Store 15% 2% 7% 13% 26% 37% Source: CEA Multi-Channel Alignment in CE Retail (2013) Base: Online U.S. Adults (n=1,027) Question 20, “How often do you use a mobile device, such as a smartphone or tablet, when shopping for electronics products in a retailer’s physical store?” Every time (100%) Usually (75-99%) Often (50-74%) Sometimes (25-49%) Rarely (1-24%) Never (0%) 22%

24 Impact on Returns More than number and web-page. Consumers help themselves – Set-up, troubleshooting, repair Compulsive Buying? Gluttony of online purchasing GOOD BAD

25

26 Site-to-Store Shipping is growing Source: TraQline Units R4Q Q2’13 -5% 4% % Online Customers who choose “ship to store” 7% 4% 5% -10%

27 WHAT’S DRIVING THE PURCHASE?

28 CE Product Purchase Drivers Source: CEA, Millennials: The New Face of Retail (2013) Base: Online U.S. Consumers ages 13+ Q: When you are deciding which electronics products to buy, how important are each of the following in your decision process?

29 Experience & Assortment Increasingly Important in Store Selection Source: TraQline Units R4Q Q2’13 % %

30 Impact to Returns More to the buy than just price. Trusted brands Shoppers seeking experience and know-how. Bargain hunters will persist Lower consumer tolerance for product/set-up issues? GOOD BAD

31 2014 International CES: Hot Products To Watch

32 Theme for 2014 CES DEVICES CONNECTIVITY CONTEXT

33 Smartphones Trends for 2014 – Curved, semi-flexible screens Samsung and LG Will trickle down to other OEMs later – Pushing the limits of pixel density (PPI) – Much larger batteries – 4K video capture – More size experimentation

34 Smartphones Samsung Galaxy Round – Curved 1080p AMOLED display – MSRP ~$1300 (import) – US release early 2014 – Same specs as Note 3 LG G Flex – Curved, flexible 6-inch 720p screen – MSRP ~$1000 (import) – Screen can flex up to 88 lbs force

35 Smartphones Huawei Ascend Mate II – Follow-up to 2013 CES debut – 2GB RAM, octa-core processor – Likely 6-inch 720p screen Sony Xperia Z2 – Follow up to 2013 CES launch – Sony’s 2014 flagship – 20MP camera, 4K video capture – Water and dust resistant

36 Tablets Trends for 2014 – Size experimentation above 10.1 inches – Dual operating systems – X86 based designs might get some attention

37 Tablets Panasonic ToughPad 4K – 20-inch Windows 8.1 tablet – 2840x2560 IPS screen – Designed for “creatives” with stylus and Intel Core processor Huawei PhoPad – Rumored CES release – Competitor to Asus PadFone – Smartphone docks into tablet – Asus TODAY announced PadFone v2 coming to US in 2014… Samsung Galaxy Note 12.2 – Rumored to be in production – Possible CES debut?

38 TVs: UHD 4K and Beyond Trends for 2014 – Ultra HD everything, everywhere – Curved (and possibly flexible) displays – More OLED promises? – What about Ultra HD content 2013 Netflix announcement

39 TVs: UHD 4K and Beyond LG Curved OLED TV – 77” curved OLED – 3D and SmartTV capable Flexible TVs – Korean sources report that Samsung and LG may demo flexible TVs – Manipulate viewing angles for best possible picture – What about 3D? Samsung 111” Ultra HD – Claim: World’s largest 240 Hz Ultra HD TV Dish Network Virtual Joey app – Allows Dish customers access to content on other devices (consoles, SmartTVs) – Allows access without STB

40 Health & Fitness Trends for 2014 – Product mix is all over the map – Lots of traditional products with smartphone integration – CE bridges gap between electronics and other industries.

41 Health & Fitness Sleep Number x12 Bed – Allows for voice- controlled adjustments – Sleep tracking tech integrated with sleep patterns and quality data Reebok Checklight – Checklight detects concussive impacts to athletes – Concussions in youth sports are a major concern

42 3D Printing Trends for 2014 – A media darling, 3D printing is maturing – Format wars? Extrusion vs. stereolithography – Price vs. output quality

43 3D Printing WobbleWorks 3Doodler – World’s first 3D printing pen – Heats and cools plastic as it passes through the pen – $100, available Feb. Pirate 3D “Buccaneer” – Began as a Kickstarter project – High-res 3D printer for consumer use – Has its own “app store” to download design files – $500, available April

44 Wearables Trends for 2014 – Wearables will be everywhere Smartwatches will be the main focus – Most wearables will be focused on the sensors embedded in them – Innovation for wearables will be in software and how much like a “regular accessory” they look Geek chic is not going to work for everyone

45 Wearables Neptune Pine Smartwatch – Takes a SIM card, requires no additional phone – Runs full Android OS – 2.4” screen, dual 5MP cameras – Started in 2013 as a Kickstarter project Qualcomm Toq – Works with Android smartphones – Uses an always-on Mirasol e- paper display – Charges wirelessly and lasts for several days between charges

46 Parting Thoughts Mobile technology: the epicenter for returns? The channel continues to innovate. – Engagement: SwS, apps, social, service, stores – Omnichannel Marketing Price still important, but other factors rising. – Changing the narrative CES 2014: Devices, Connectivity, Context Steve Koenig Director, Industry Analysis Consumer Electronics


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